New American Funding Blog

Buy vs. Rent: The American Dream

By Chelsea   |  March 18, 2014


When I was growing up, my mom, brother and I always rented our home. This didn't really bother my brother and me, but I couldn't understand why my mom always seemed so unsatisfied because of this. On the surface, regardless of if you rent or own, you are still just paying someone for the privilege of having a roof over your head, four walls and some doors and windows. When I asked her what was so wrong with renting, she told me it was because there is something much more substantial about being able to own a home of your own and not only that, but home ownership is also an investment towards the future. To a child that makes absolutely no sense because children have little knowledge or awareness about the future; as a recent college graduate and having now been able to witness the joy of seeing my mom finally be able to purchase her dream home for our family, this idea of the American dream is starting to make a little more sense.

I did some research I thought I would share with you to help make the advantages of home ownership a little clearer:


When I was around thirteen, I remember getting so mad that I couldn't paint my room pink, or really any color at all, since our rental agreement did not allow us to alter the color of the walls. It was my room, I spent a good amount of my time in there, and yet it didn't feel like mine because I wasn't able to decorate it the way I wanted to. I was stuck with boring white walls and I hated it. Even having the ability to hang art or photographs on the wall can breach a rental contract and causes additional stress when you decide to move because you have to fix any damage you have done to the property. It's hard for a home to feel like your own when you have little to no freedom in the choices you are allowed to make in terms of decorating, renovating and personalizing.


I never understood how important privacy was until I had my first landlord who completely invaded mine. The most difficult part of renting is the knowledge from both parties that the place you live in does not belong to you and that there are rules you need to follow if you want to continue living at this address. Regardless of if you are the perfect tenant or not, it is still difficult to be comfortable living in your home knowing that at any time your landlord could invade your space (because it isn't your space, it is his or her space!) Your home is supposed to be the place you go to unwind or spend time with your friends and family. It should not be a place where you feel as though you are either walking on eggshells or constantly needing to discuss any issue that many arise with your landlord.

Financial stability:

Paying rent often comes with changes in the amount you pay monthly sometimes with little or no notice. This isn't a problem you face when you own your own home, because when you enter into the mortgage agreement with your lender, you are given a schedule with your payment amounts throughout the life of the loan. This is an advantage because you know what you are getting into up front. At any time you can also choose to refinance and lower your monthly payment.

Puts down roots:

Having the freedom of not being tied down to one set location can sometimes be nice, but it can also be a burden. While my mom made every effort possible of keeping my brother and me in the same school district, it was hard for us to really feel like part of the community because we were never sure how long we would be at one house. Owning a home allows you to place roots in a community or neighborhood you want to call home for potentially the rest of your life. Home ownership becomes a bigger commitment because of this, but it is well worth it for the sense of community you will feel by placing your roots in the right location.


Renting is similar to staying in a hotel; you get a roof, walls, windows and doors. You get exactly what you pay for and when you chose to leave, you get nothing back in return. Homeownership is different though, because as my mom told me, it really is an investment towards your future. While you will see the benefits of joining a community and gaining freedom right away, the financial benefits will pay off in the long run. The longer you live in a home and continue to make your monthly mortgage payment, the better chance you have to gain equity in your home. What you chose to do with the equity is ultimately up to you. Paying off your home is one less bill you will have a month, but if don't ever plan on moving, you could extend the life of your loan and potentially use the money you have invested thus far to assist you with other bills or debt.

My parents have lived in their new home for a while now and still enjoy the perks of homeownership very much. When I asked my mom what it was she loves so much about the house, she said, "I am still happy there and it feels like a place I want to come back to every night because it's my safe place and I make the rules over what I want to do with it." And that's exactly what it should feel like.

Feel free to share this blog with anyone you know who is looking to buy a house and reap the benefits of owning a home over renting!

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